Rebound in Financial Markets: Market Makers (04/16)

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April 16 (Bloomberg) -- On today's "Market Makers," Erik Schatzker and Stephanie Ruhle use analysis, insights and A-list guests to help set up your daily market trades. (Source: Bloomberg)

We are happy to take questions.

We will try to take as many as you have.

Maybe we will just go from side to side?

Yes?

[inaudible] more than the evidence is the extraordinary cooperation among city's law enforcement agencies.

As the mayor and others have said.

At the federal, state, local level, and from the region we have an unprecedented level of lot engagement -- of support and engagement, they are working well and seamlessly with each other, giving me a lot of comfort and it should give the public comfort as well.

What a insofar that helps you to understand -- anything so far that helps you to understand [inaudible] origin of the material?

[captioning made possible by bloomberg television] captioned by the national captioning institute --www.ncicap.org-- i think i know what you are getting at.

Let me turn it over and said it is better to not comment.

[laughter] thank you.

I cannot comment on that aspect of that.

What is important here today is that there is no known imminent physical threat at any location where we have been conducting an investigation.

I wanted to put that out to the citizens of the city of boston in the commonwealth of massachusetts.

Do we know anything about the nature of the device?

[inaudible] how is it that devices this powerful could have eluded [inaudible] i will not be able to comment on that.

[inaudible] i will not say who or who may not be in custody right now.

Let's looking for the roommate in that unit?

It is a key component of the boston joint terrorism task force active with us right now, interviewing witnesses for this investigation.

My role, man [inaudible] we are processing a lot of photographic evidence right now but.

As the speakers said today, we encourage the continued submission of any photographic evidence that could be of value, but i could not comment on specific tips or leads right now.

Can you tell us about the surveillance cameras in the area?

Were you able to use those?

Were they at all helpful?

I think that commissioner davis can probably speak best on surveillance cameras in the area.

We are processing all of the evidence that we can right now as quickly as possible with resources from fbi headquarters and quantico.

Commissioner?

Speak on the video cameras?

Thank you.

It is basic investigative protocol at this point for us to secure all the video in the area.

Even as we were removing victims yesterday, officers were assigned for going to local establishments to secure those videos.

There were a large number of them.

There is a logistics issue right now.

We are working with the fbi special teams to process them.

It is our intention to go through every frame of every video that we have to determine who was in the area.

Coming and going?

[inaudible] stay away?

Best recommendation?

We want you to live your life.

We want you to be vigilant.

There is no reason to not come into the city.

But we do have a threat that we are working diligently to reduce.

We want you to go about your business.

Give us a moment.

Be patient with us as we processed this scene.

We are trying to turn it back to the business community as quickly as we can.

You might have 100,000 pictures out there.

[inaudible] a good question.

What we would like is a 4 reading of many voters had to have from around the time of the blast, particularly from that area, but also tell us the time that they were taken so that we do not have to go to the electronic signatures.

Naturally, photos taken closer to the blast, just before, just after, those will be critical and we will try to prioritize those.

Those photos and any other information will help the investigation move forward.

Devices in exploded [inaudible] but there is no evidence of that.

Removed?

There is a sweep that was done, eod, one that was done in the morning, another of one hour before the first runners came across.

Those sweeps did not turn up any evidence.

But because there was unrestricted access to the race course, 28 miles long, people could come and go and bring items in and out.

Any evidence that the three people who were confirmed dead, [inaudible] they are all victims as far as i know.

Sorry?

Life [inaudible] we -- [inaudible] we do not have any information on that.

[inaudible] we have a number of 176 casualties presented at area hospitals, including hospitals on the south shore, not just in boston.

176 is the best no.

I have right now.

Three fatalities.

Let's [inaudible] -- [inaudible] no one is in custody.

Right.

[inaudible] ruling out groups?

No.

[inaudible] as an ongoing investigation, it will certainly not be confined only to the city limits.

It will extend out to the eastern massachusetts area.

This will be a worldwide investigation.

We will go with the leads take us, to the ends of the earth to identify the subject or subjects responsible for this despicable crime.

We will do everything we can to bring them to justice.

[inaudible] i cannot comment on that aspect of the investigation right now.

[inaudible] we are interviewing a variety of witnesses at a variety of locations, that is ongoing and that is the most beckham say about that right now.

[inaudible] again, that would be commenting on specific leads and possibly compromise the investigation.

I could not comment.

Let's [inaudible] -- [inaudible] we have many components on the street right now conducting the investigation as swiftly as possible.

[inaudible] i would say that we are out in the street in a variety of areas, inside and outside the city of boston, conducting an investigation of with the leads and evidence takes us.

[inaudible] i was not aware of any threat information prior to the marathon.

As i mentioned earlier, i am not aware of any physical threat information from any unexploded devices or further devices and to the best of my knowledge there is no imminent physical threat anywhere associated with this investigation.

What do you say to people outside the area?

To the folks watching this, that we are a city that is brazilian, law enforcement is working on this issue, and we need the cooperation of the public.

Folks out there know that something is going on?

Give it to the fbi or boston police.

Whoever you want to give it to, but we are a brazilian city.

This is one incident that will not block the city's history.

How are you feeling?

Feeling good.

What a thing of.

-- thing.

That was the official news conference not far from the site of yesterday's deadly bombings at the boston marathon.

Welcome to "market marathon -- market makers." also hear this morning we will be following the rebound we are seeing in financial markets after the worst plunge of the year yesterday.

Gold, a miniature rebound with solid earnings from goldman sachs as well.

Let's take every one straight to the top story, the bombing in boston and the terrorism investigation under way by the fbi.

Julianna goldman brings us the latest from washington.

First we bill go over to boston, where dominic chu is that the location of the fbi news conference.

Bring us up to speed on the latest information we have learned on the attack.

You can see the press briefing has just concluded.

They're holding the door is to clear the people who have just spoken, all of these vip's will be escorted out first.

Of what you heard during a press conference was a number of different things.

First of all the fbi, the governor, atf, they all said that there were no indications of other unexploded devices.

It also heard the police commissioner of boston saying that they have produced a the crime scene area from about 15 blocks to 12 blocks, they have narrowed their search area as well.

The superintendent of the state police for the commonwealth of massachusetts saying that people in the area should continue to expect to see heavier police presence, national guard presence, joint terrorist task force presence, concluding what would be a several day investigation into what happened with the boston marathon explosion.

Senator elizabeth warren speaking on behalf of her congressional delegation from massachusetts, saying that the obama administration reached out to massachusetts and their congressional delegation by providing resources, they did not reach out to president obama.

The u.s. district attorney saying that eric holder, the u.s. attorney general, pledging all the resources and support needed to help this investigation along.

A number of different points.

We did not hear anything with regards to any suspects or new leads.

We are still waiting on developments there.

From the fbi, you heard him say that he would not comment on those topics.

Those are the things that we know right now and in essence that is what we are still looking to find out, any new leads.

No indication of that just yet.

Thank you for the update, dominic chu.

Updates coming from boston throughout the show.

President obama is getting briefings on that investigation, directing all the necessary resources to the task forces as needed across the country.

The president, among other things, has pledged to find those responsible, as we would hope.

That is right.

The president was briefed overnight by his counter- terrorism expert.

Also with robert mahler.

Other senior advisers in the oval office as well.

We are still waiting for word on whether or not that has occurred.

The president in a private and public statement yesterday, pledging all available resources of the federal government to be mobilized to help in the ongoing investigation response efforts.

I have directed the resources of the federal government to help state and local authorities protect their people, increase security across the united states, and investigate what happened.

The yesterday the president did not call this a terrorist attack for, but white house officials say that this is being treated as an act of terror.

The fbi is leading the investigation, which is key to providing all the available resources.

Right now it is making sure that all the different agencies, intelligence, national security, the u.s. attorney, fbi, making sure they are on the same page when it comes to getting to the bottom of this.

We will hear more from you as well.

We need to make sense of all of this.

Bloomberg contributing editor, years of experience, a top security posts in the white house in new york city, being with us for the last 24 hours to make sense of this.

He listened to the news conference.

Very little was said.

This was an extremely cautious performance.

Politicians needed to get their air time in two said they were working.

The fbi special agent was typical of senior law- enforcement officers.

Just saying no comment.

Two important things, they made it clear that it was just too devices.

There was a massive amount of misinformation yesterday that changed repeatedly over the course of the coverage.

Just to devices, that is important.

The second, and very few would pick up on this inside baseball, the second speaker after the fbi special agent was the atf agent.

A very small department, and this is unusual in terrorism briefings to have them go next.

From my thinking there is one explanation for that, they now have reason to believe that it is a domestic source that involved the illegal purchase of explosives equipment from a u.s. source.

Because that is the job of the atf.

They regulate the sale of black powder and investigate felonies -- were they not be checking on l -- anyway just to eliminate the possibility?

They will, but they know exactly what that device is, they simply are not telling us.

They can analyze that from the cavaco residue.

From what i have deduced, merely a deduction, because they put him in its prominent place, the atf, and they believe that these explosives were acquired domestically rather than bought or fabricated from common chemicals.

If you are right and the participation of the atf.

Signals that the working assumption is that this is an act of domestic terrorism, but further conclusions might be be able to tentatively draw -- what further conclusions might we be able to tentatively draw this morning?

International terrorists who have attacked in the past tend not to rely on things like black power and commercially available explosives.

Timothy mcveigh on the other hand, he did have commercially available explosives.

Richard jewell, the bomber in atlanta, 1996, that was a black power bomb.

Building them with a pipe, the recipe is in the anarchist's cookbook and the is used by a number of domestic extremists.

They are giving us, frankly, very little to work with.

Is that typical?

Or is it just that they do not know very much right now?

That is a big part of it.

The bill always fall back upon that.

Clearly they are in the middle of this.

If there had been a big break, there would have been other sources of reporting.

Acknowledge something, there has been no big break yet, that is my guess.

They are under immense pressure.

They are really taught to say almost nothing.

The fbi in its heart of hearts would rather not have press conferences like this.

They have to, the public will not tolerate otherwise.

They officially gave the absolute bare minimum.

But you did hear the appeal from officials to essentially crowds or information on this.

Is there a chance, in your experience, that the fbi joint task force will get more useful information from people who might have seen something?

Of life they specifically asked for photographs.

-- they specifically asked for photographs.

There may be pictures in the footage from yesterday.

Anything is possible.

They go out -- they go over massive amounts of digital imagery frame by frame and it is very painstaking.

How is this surveillance in boston compared to new york city?

It is different.

Each individual establishment will have their own, on entering the general exterior of their premises.

-- monnat during the general exterior of their premises.

-- monitoring the general experience -- exterior of their privacies.

How much time do they have?

-- premises.

How much time do they have?

As much as it takes.

I think they are concerned about this report yesterday that they are now essentially this about, reported by "the new york post, close but that there was an individual in custody.

That gets a lot of coverage -- a lot of speculation belling.

They do have a lot of what they call persons of interest, people who will turn out to be victims or perpetrators.

We were talking about previous acts of domestic terrorism.

The pipe bomb incident at the atlanta olympics.

People drawing conclusions about the perpetrator, there was speculation that the time that it was richard jewell, later proven that it was the case.

Faugh we heard about people of interest yesterday, it may turn out that they have nothing to do with the case.

Lots of rumors.

It is a real dilemma for lawmakers, particularly in the early stages.

They are type a personalities who want to get this done more than everyone.

These are people where lives have been lost, their city has been attacked, they are personally offended and they are aggressive about pursuing things.

Unfortunately sometimes they get the wrong idea.

You get this miscarriage of justice, it does happen from time to time.

Richard, thank you for your invaluable perspective.

Former director of counter- terrorism for the nypd, thank you.

Let's "market makers -- "market makers," continuing with the latest information as we have it.

Welcome back to "market makers." could this be as good as it gets for goldman sachs?

They reported earnings this morning and by many measures they were good.

Rising when you're go from the investment on the return on equity being 4%, nothing to get excited about.

The shares have been trading down this morning.

Here to weigh in, the top authorities on goldman everything.

Among their top picks.

The co-author of money and power, contributing editor, "money rules the world." is this as good as it gets?

Nope, nope.

We have the beginning of an investment-banking cycle in north america only, right?

A particular shift in terms of capital structures of banks in europe.

As a result, rising rapidly, the trading business, over the top.

We are still in an evolutionary.

And as terms as -- in terms of as good as you can get, no, goldman sachs is dragging around a lot of surplus liquidity.

So, it could be a bit of a week before it gets better?

We will continue the conversation in a moment.

We need to take a quick break.

More on goldman sachs when we come back.

Welcome back to "marketmakers". we are talking to two of the best people in the business to talk about goldman sachs.

Brad, you were just telling us that, no, this isn't going to be as good as it gets for goldman sachs but what's going to determine largely if the bottom line improves quickly is going to be compensation.

We've talked about goldman sachs paying 43% of its revenue this year to compensation.

As we know traditionally banks pay in terms of compensation.

It's one variable cost these businesses have and that smgget why they were probably able to beat earnings.

While it's not as good as it gets for goldman but if their trading kicks in, it's about as good as it gets for investment banking.

Stock market was rising precipitously in the first quarter and that means investment ratings were rising.

Well, in terms of compensation, it's all about cost cutting.

That's been a continues theme.

How is that reallyive to some of the other relative bank c.e.o.'s? they brought their ratio in more than the other players and the numbers we have come up with imply that to beat your cost of capital you will have to bring your comp ratio down to 40 and this will bring you down your cost of capital.

So goldman we're seeing them bring their comp ratio down.

They are doing all the steps that we mathematically decided that you had to do, but what they are -- and they are looking forward to a day where they will make money in the fixed income side.

Picture it.

You're a world famous trader and somebody is going to come up to you and say thank you for your service and it's time for you to move on to your hedge fund.

Trading volumes are dropping.

So the business model of trading is changing.

So i'm stale bit confused.

Because if we agree that trading conditions are firm and they don't get hit on the that he had way commercial banks do, stock markets are tight and there's demand for new credit.

How is it that it's going to get better if you don't believe that the scommi going to accelerate?

I mean, they talked about their investment banking backlog being lower than it was in the fourth quarter.

Right.

And that one i would not -- but if you took the noogs this is the new normal.

No.

but we can -- we have europe that's weak.

Right.

If we were to come nair to 2005-2006, it's one half of 2005-2006. we really don't have the strategic corporate m&a coming in.

We have a lot of deals waiting to be liquidated into private equity funds.

So what we need is -- so the outlook for trading relatively speaking is hot.

Is it as good as it's going to get?

Trading is going to have a time trading off.

The reason is because they are not bringing the e.r. up and their balance sheet is flat.

And don't forget the black box that's goldman sachs, 90% is trading.

So while we can see the debt and equity issuance and m & a -- but on the fixed incomes trading side who knows what they are really up to and the regulators are basically saying, and this is before the vogel rule gets implemented.

It's good that you brought up regulation because surely the new rules are showing up and it sounds like from the c.e.o. comments they are bracing for more.

Well, goldman has narrowed.

It's dropped and come closer to the pack.

So goldman's trading expertise hasless value.

Their investment banking is perfectly fine.

Their private business is in a stage of evolving equity to sub ordinated debt, so what you've got is a her chant banking portfolio that's liquidated and i look at goldman and say you should be betting early cycle investment -- whether you want to do green hill or goldman, the large cap play -- which one do you like?

I like goldman as a large cap play.

"money and power:how goldman sachs dime truly world" author.

And contributor here.

We'll ask former longtime president of the minneapolis -- coming up on bloomberg television.

Welcome back to "marketmakers" i'm erik schatzker we return to our top story today, the boston marathon bombing.

Some new developments.

We have learned there are 176 injuries and 17 of those are critical.

For more on what we have learned today and continue to learn let's go to adam about a block away from the marathon finish line, adam, bring us up to speed.

Well, yes, eric, you can see behind me that's copley square.

It's still a scrime careen scene.

The copley square the scrime sight then here we are on the corner of dartmouth street and stuart street walking back and forth.

A lot of runners are still walking in this area trying to figure out what's happened.

Many organizations are dealing with this differently.

The different universities, some are open, some are closed.

Let me show you what i know, boston university, open.

Emmanuel college and other institutions have decided to open.

On the other hand tough university of massachusetts, harvard business school and emerson college and berkeley college.

They are all closed.

So there is no precedent.

This is unchartered territory, eric, boston is trying to figure out how to best deal with this.

We of course heard from the various members of the f.b.i., the a.t.f., the boston police department saying we have leads and we're still pursuing them but this is an ongoing investigation.

I spoke to a recent rand frequent guest, mr.

Capellan and asked how did you come to the decision to close today?

He said this is such a dramatic moment and we need deal with this as a community and we have never closed harvard business school but we thought we could bring everybody together and talk about it.

Again, there is no precedent.

That's why some schools are open and some are closed.

It's an ongoingal situation.

Great perspective.

Some colleges are open and some are closed.

We're unfortunately used to dealing with acts of terrorism.

That's anchor adam johnson.

He will be back at noon for a special report with trish regan.

And in the meantime we want to bring you up to date on a big market story people are focused on.

The market reserve could be using two exits.

Ben bernanke signaling that his time at the fed could be over and who could take the reigns of the fed chairman and how will it mean for the stimulus program and for the market here with us, reserve president gary stern.

As the longest serving president in the bank's history, gary, it's good see you in person.

Good morning.

Who will fill ben bernanke's shoes?

Any idea who quo you would like to see?

I think there's a number of strong potential candidates and you have to bear a criteria in mind, the ability to do the job well at a very high standard.

The challenges the fed will face and continue to face, and thor is confirmibility.

You have to name somebody who will get confirmed by the senate, and names in a come to mind are chairman janet yellen and annual blinder.

I think they both, all of those candidates would meet the criteria identified and all would be excellent choices.

They seem logical to me.

If this were a company that needed a turnaround, you would bring a c.e.o. is this a company that needs a turnaround or should they stay slow and steady?

I think the challenges ahead will probably be different from those in the most recent past, but you want somebody experienced.

And we shouldn't forget one of the real strengths of the federal reserve, and i did work there for a long time, is the staff both in washington and at the reserve banks and there ends the to be a lot of continuity in the staff.

Because of the council and alternatives and choices when it comes to policy that they can present to the chairman and to the open market economy and so forth.

But if you were to take a sample from economists you would detect that maybe it's time for a break with the degree of continuity we have had with the fed.

There are lots of people who have things to say that aren't particularly favorable.

I'd agree but i don't think -- i think you have some people that would go as far as if not eliminated the federal reserve, returning to a gold standard and on the o side there are people who think the fed have not done enough to do more and you don't have a consensus there.

Well, the person whose opinion really matters is president obama.

What relationship do you have between the president and ben bernanke?

Because that could tell us a lot, too.

Well, he did re-appoint ben bernanke so there's mutual confidence there.

I'm sure he would consult with the chairman as the successor but you're right i think he wants to be followed by somebody he feels confident in and i think they would all meet the criteria.

So it's if -- if it's not going to be those and they want to go time-outs circle of comfort, where would he go and who would've a chance?

I tell you where he won't go and that's wall street.

Because i don't think you can get somebody from wall street confirmed.

I think you do want somebody with good knowledge of macroeconomics and finance.

Obviously a high degree of personal integrity and so forth.

I think you could probably identify some academics.

Yes.

Goldman sachs executive.

So -- is the goldman sachs pedigree toxic in washington?

I wouldn't limit it to goldman sachs.

I don't know that i would use the word toxic or toxicity but there's a fair amount of tension between congress and wall street these days which makes it exceedingly difficult to get something done.

Because -- that doesn't suggest or necessarily speak to wall street.

No.

that might be fine for the president.

But i could imagine there are lots of republicans in the senate that would not be really happy about that.

What about tim geithner?

While i think tim did an outstanding job as treasury secretary during tough circumstances, that's a double-edged sword.

There are a lot of people 245r7 not happy about the resolution of the financial crisis and forclosures -- forclosure situation.

And i think that makes it very difficult to get somebody like tim confirmed.

All right.

Gary stern, the former president of the minneapolis federal reserve.

It's a question we will continue to ponder as you can bet everybody in the markets will.

Yes.

Because ben bernanke may depart the fed as soon as the beginning of next year.

And are the glory days over for this and other commodities?

Welcome back to "marketmakers" everyone.

We continue to follow the aftermath of the boston marathon bombing.

I want to bring you up to speed on some headlines that we just became aware of.

At la guardia, the domestic airport police are said to have found a suspicious package.

We don't know very much about this other than that.

The level of alarm is heightened enough that apparently, and we have yet to confirm this, la guardia's central terminal may be in the process of evacuation.

Don't want to raise an undue level of alarm but again nation is on high alert after the bombings in boston yesterday.

The police are vigilant for nation might be suspicious.

Again, a suspicious package is said to have been found at la guardia and it's possible the central terminal here in new york city is in the process of evacuation.

More details as they become available.

Clearly the reverberations are being felt outside boston.

We are seeing a rebound and rally in u.s. stocks but the price of gold has been falling.

Also want to take another wick note.

The president has issued a pro stock la nice lower building flags to half safe.

-- to half staff.

You can see the flags being flown at half mass.

Tough on a day like this to cover the ground as much but let's talk about the price of gold.

This is certainly the focal point for financial markets right now.

The question is what now?

Gold has had its biggest one-day drop this three decades.

Yesterday a little bit of a rebound but we want to top the analyst with precious metals and suchy, quite the selloff raising all sorts of questions about whether this is the old end of the 12-year bull run for gold.

We have seen a combination combined with the central tpwhangse europe might be asked to sell gold and have it weigh phenomenon central gold markets.

The key is how much support do you get . so far the demand has been mostly lackluster.

But there's a concern we may not see the sort of physical demand that's been given over the previous years and it's been falling short because it's compounded by the outflows back in february.

So there's extra supply in the market257bd physical market isn't strong enough to absorb it.

So suchy, the dereal demand for gold -- and i know this has been debated back and forth, are the indians possible for gold up side?

It's a combination.

If you see strong demand from india and china that can provide support and we've seen buying and picking up in both regions over the past couple of days.

But if they continue at the pace we saw in february and in april as well, then that's much larger a supply that both these will have to absorb, and that's just not strong enough at the moment.

Thank you for our "futures in focus" segment.

We will bring you the latest headlines as we get them on the boston bombings in two.

Here are "marketmakers" and on bloomberg telecircumstance our focus is on the aftermath of the boston marathon bombings.

Bloomberg television will take you live to boston after mid die continue our special coverage of this terrible event.

The fallout of the bombing.

Stay tuned.

"marketmakers" is back in two minutes.

[captioning made possible by bloomberg television] captioned by the national captioning institute --www.ncicap.org-- live from bloomberg headquarters in york, this is "market makers." the boston marathon bombing, new details and an appeal from help from law-enforcement agencies.

Is the yahoo!

Turnaround for real?

The earnings today could give us an insight on turning around the company bought j.c. penney is looking at new ways to raise cash by borrowing against its real estate assets.

This is "market makers." let's go straight to our top story this morning -- the aftermath of the boston marathon bombing.

There are new developments in the past hour.

We have learned that the number of people injured has been increased to 176 which include 17 in critical condition.

Let's bring in dominick chu in boston.

He is one block away from that marathon finish line.

Good morning, we're talking about fatalities that were not increased.

They are still three.

During a press conference, we heard the governor of massachusetts saying that only two explosive devices were found.

There were no more that have been found.

Senator elizabeth warren who heads up the congressional delegation for the commonwealth of massachusetts also said the obama administration had approached them first to reach out.

They did not have to reach out to president barack obama.

Carmen ortiz the u.s. attorney on site here saying the attorney general eric holder has pledged his full support of the justice department to help figure out what happened in boston.

Another interesting voice here interestinged davis, boston police commissioner, speaking about how complicated and complex and how this investigation will take some time.

We are in the process of securing and processing the most complex crime scene we have dealt with in the history of our department.

Ed davis said this is a complex situation.

We know that the fbi special agent in charge said this will be an investigation that could last for quite some time.

We also heard from jim alben, the superintendent of the massachusetts state police and he said everyone can expect to see more security and police offers and national guards and a lot of heightened awareness about what is going on until this gets resolved.

The one thing that did not come out of this press conference is any indication of any suspects.

You would not expect there would comment on this until they have some definitive, and right now, they're not making any comments on that front.

Still plenty of questions out there but thank you.

We will check in with him a bit later.

There was an evacuation at new york's la guardia airport.

We still don't have a great many details but a central terminal building at laguardia in queens, one of the boroughs of new york city, has been evacuated due to a suspicious package.

This according to a race spokesman for the port authority.

The bomb squad of the york city are responding to the sea in according to the spokesman for the port authority.

No further details and we have no idea whether there is any connection between this and what happened in boston yesterday.

Police across the country are at high didn't levels of alert.

It goes without question.

We will bring you more details as we get them.

We will continue our conversation -- we're just learning that president obama will be speaking at 11:30. we have been waiting to see.

Julianna goldman said it is a matter of when he will speak and it will be at 11:30 a.m.. someone who knows the president's position quite well is daniel benjamin, a former ambassador at large and coordinator for counter- terrorism at the state department and left that position in january.

He is now director for the dickey center at dartmouth.

Let's go back to january and your experience at the state department.

Can you tell us if there was ever any discussion about the potential for a terrorist act in the city of boston in particular?

Had the state department never picked up any idea that boston would be the kind of center for the action we saw yesterday?

That's a good question.

There has been threat information associated with virtually every city in america at some point or another.

The overwhelming majority of it is either non-specific or not very credible.

I cannot say with any certainty that there was not a warning but this was not a threat that anyone had seen.

I am not aware of any specific threat information regarding boston.

In terms of the major international terrorist organizations, we have not seen boston very high on their target list.

With your expertise on counter-terrorism and the little information we know so far, what do you think is happening here?

Who and why and is there an explanation?

We know so little at this point that it would be pure speculation to say who was behind this.

I think there are some inevitable nominees who have more likely involvement.

Al-qaeda is the most active international terrorist group and the one most interested in targeting the united states.

It is pretty unlikely that this is a foreign-directed the attack but we cannot rule that out.

It was possible there were individuals motivated by what they had seen on the world wide web and videos that may be acting on their own.

There is a decent chance this has nothing to do with international terrorism but maybe the results of the extreme right-wing militia movements like white supremacist-type groups.

April 15 was patriots today.

That phrase has resonance.

And tax day as well.

In the post newtown, conn.

Period, there is agitation about the board about having their guns taken away.

It could be any number of different things.

It is pure speculation at this.

. how confident should we be?

When i think back to previous investigations like the 1993 terrorist attack on the world trade center, the one that preceded 9/11, the bombing in oklahoma city and everything we have seen since then, the federal authorities are pretty good at getting their man or identifying the perpetrator.

Should we be as confident in this situation?

I think we can be quite confident.

The fbi and the associated federal authorities have an extraordinary record of solving these cases and no one has greater forensic capabilities, intelligence capabilities, investigative capabilities.

I am quite confident it that we will get to the bottom of this.

The question is how much time?

How do you perceive a threat to other cities besides boston?

Again, it is quite difficult to said.

It is natural after an event like this that major metropolitan areas will raise their security levels and take additional measures because it is very difficult to sag whether this is -- to say whether this is one attack in a campaign or whether this is a solitary event.

The fact that these devices are very generic or appear to be very simple gives you a small bit of hope that this was a solo operator and therefore they would not have the capability to carry out additional attacks.

You have to be prudent and take precautions to ensure public safety.

What about boston?

We are somewhat familiar with terrorism in new york city.

It rears its ugly head off in thften enough.

Powell will boston respond?

I am pretty confident that all of our major metropolitan areas are capable of dealing with these kinds of events.

Remember, the investigation will be run by federal authorities who will have a large presence in this.

The city will get assistance from the federal government.

At the same time, the department homeland security, the department justice will be very engaged.

They have extensive programs for working with first responders and working with police to ensure they can do everything they need to do to cover the safety and security of the population in boston.

This will be a new and deeply disconcerting experience for the people of boston.

Our city officials tend to be quite capable and i think they will get on top of best.

Mr.

ambassador, thank you very much.

Daniel benjamin is the former ambassador at large and coordinator of counter-terrorism for the state department now for the dickey center for understanding at dartmouth.

At 11:30 this morning, we will hear from president obama on the subject of the boston marathon bombing.

They're getting ready in washington.

This will be the second time we hear from the present on this topic.

Let's turn back to the markets.

Stocks are bouncing back after the worst drop in five months yesterday.

Julie hyman is watching and it looks like economic data and corporate earnings are giving stocks a boost?

It is not just a knee-jerk bounceback from the declines we saw yesterday but there is some fundamental news behind it.

We got housing starts up 7% last month to a pace of about 1.4 million which is the highest since june of 2008. the cost of living index is down for the first time in four months.

That is helping the market along with corporate earnings.

All of this is helping the s&p 500 higher by 2/3 of 1%. it is all in line.

In terms of the group doing the best, it is sort of a mix of cyclicals and non-cyclical.

Materials are the best in the s&p 500 consumer staples singers the most defensive group.

Industrials are up about 7/10 of 1%. the homebuilding index is up about 1.33%. earnings season will be more important especially because of the larger companies and how overall we see equities trading.

Coca-cola is helping matters.

The earnings per share beat estimates particularly on the strength of sales in latin america.

Beverage volume there is up about 4% size of the shares are up 5%. johnson & johnson shares are rising.

Sales in particular is doing well and that income was down but it is a smaller drop than anticipated and finally www grainger beat estimates on that stock is up the most in the s&p 500. thank you very much.

Just a reminder, and about 50 minutes, we expect president obama to deliver a news conference -- in about 15 minutes, we expect president obama to deliver a news conference at 11:30, addressing the nation on the subject of the boston marathon bombing.

We're back in two minutes.

Live from bloomberg headquarters in new york, this is "market makers." you are watching "market makers." we will have more from -- for you on the investigation of the boston marathon bombing.

Let's look at a key company making news today, yahoo!

Earnings are out.

It raises questions whether marissa meyer can reduce to the company.

Wall street has high hopes and yahoo!

Shares are up 50% more since she took over in july.

Larry haverty is a portfolio manager and this is one of his top holdings and he joins us from massachusetts this morning.

You have been optimistic about marissa meyer but still, the task will be tough.

What keeps you optimistic?

I am more optimistic about what is going on in china with ali baba.

We had the last value add $7 billion and looks like ali baba have an ipo and i think there is another $7 billion at least coming out of ali baba and if you double the valuation, it is $14 billion before taxes.

That is more than $10 per share.

You have this tremendous upside if ali baba goes public and at what value.

The market is still valuable and ali baba, the prices virtually nothing for $1 of domestic cash flow.

There is about 1.6 billion of domestic cash flow.

I think it will go down before it goes up but i don't think it will go down too much.

We value it at eight times the traffic is a reasonable multiple.

We got another $8 per share in the company.

If marissa meyer can really do something, the multiple is probably too low.

Much of what you are saying sounds like what we talked about before marissa meyer came in.

All of this value is locked up inside yobbo and yahoo!-japan and ali baba, the case eighth for a higher share price.

What about an operating turnaround?

Is yobbo age legitimate tech turnaround case or is a matter of the numbers and waiting for yahoo!

To realize that locked up about you?

I think you have a pretty stable business.

They have made some alliances.

You are seeing the name of yahoo!

More often, some strong alliances in the finance area.

They have increased their staff so they are moving in the right direction.

I personally do not think we will see any fundamental evidence of marissa meyer's impact until the third quarter for if i get it earlier, that as a bonus.

Before the september quarter, i will see an ipo seeali baba and six months ago, i told you i thought the stock was worth in the mid-20's and now i think it is worth in the mid-to 30's. we have a lot of call options.

We have a call option on marissa meyer and a call option on ali baba and i don't think they will take away our money if that does or.

If that gets to the mid 30's, it would erase the $31 per share offer by microsoft that was never taken.

We see yahoo!

Making alliances and acquisitions even though they are small.

To the skeptics, they suggest when marissa meyer came into the company, she found that the covered bear, not enough people to understand technology.

They had all gone.

Do you think there's anything to that narrative that she is tracking these analysis -- alliances because yahoo!

Intrinsic which does not have a lot to offer?

I don't see the engagement falling off the cliff.

That is the only thing i am legally allowed to know.

I don't have any great insights into the quarter.

If i did, i would be talking to the federal government rather than you.

[laughter] i watched the engagement and it is pretty good.

I watch what advertisers are doing and they are moving toward digital.

They are moving to the internet.

I personally believe that google and facebook will take all the incremental growth in advertising over the next five years.

What we are looking at is a bunch of people where there will be social darwinism.

It is a good bet even if it is a problematic business that they are worth more.

If marissa meyer does something, and i don't think we will know that for at least six months, the numbers are worth $9-$10. it is pretty simple.

You have an awful lot of upside and meanwhile, you still have this cash cow.

Ken goldman is a sophisticated guy and i think they bought a lot of stock at good prices.

Well -stated, good to speak with you as always.

He says it is worth in the mid-a 30's. we come back, president obama's statement on the boston marathon bombing is coming your way at about 11:30. live, from schlumberger headquarters in new york.

This is "market makers." president obama is set to make a statement in less than two minutes from the white house briefing room.

This is his second address to the american people after the horrific boston marathon bombing.

Richard falk and rap is with us now.

-- falcon wrath.

When it comes to the president's address, who is briefing him from the fbi and how much information does he really know?

In will know almost everything the investigators will know.

Lisa monaco will be his briefer from the department of plant security, replacing john brennan who went to the cia.

Bob miller was the longtime director of the fbi.

He assumed office five days before 9/11, the last remaining member of government's present on 9/11. you have delivered briefings like this when you were in the white house with president bush by yes.

What kind of information does the president typically know?

Do they typically want to know every possible working theory?

Do they just want to know the best idea?

I'm not sure how obama is about this.

Bush would want to know the essence and keith terry and the evidence and he is very practical.

He has taught to the nation and wants to know what to say.

It wants to say what is accurate and a appropriate.

How much can he say out of how much he knows?

It depends on what is going on.

And where they are with the investigation.

The security team including fbi director mueller, eric holder, s job and the politician, and, security adviser lisa monaco on the attacks in boston.

We continue to mobilize and deploy all appropriate law enforcement resources to protect our citizens and investigate and respond to this attack.

Obviously, our first thoughts this morning are with the victims, their families, and the city of boston.

We know that two explosions gravely wounded dozens of americans and took the lives of others including an 8-year-old boy.

This was a heinous and cowardly act.

Given what we now know about what took place, the fbi is investigating this as an act of terrorism.

Anytime bonds are used to target civilians, it is an act of terror.

What we don't yet know, however, is to carry out this attack or why and whether it was planned and executed by a terrorist organization foreign or domestic or was the act a malevolent individual.

We don't yet know these things and clearly we are at the beginning of our investigation.

It will take time to follow up every lead and determine what happened.

We will find out.

We will find whoever harmed our citizens and we will bring them to justice.

We also know this -- the american people refuse to be terrorized.

What the world saw yesterday in the aftermath of the explosion was stories of heroism and kindness and generosity and love.

Exhausted it runners who kept running to the nearest hospital to give blood and those who stayed to attend to the wounded, some tearing off their own clothes to make tourniquets, first responders to ran into the chaos to save lives, the men and women who are still treating the wounded at some of the best hospitals in the world and the medical students who rushed to help . priests who opened their churches and ministered to the herd and fearful and the good people of boston opens their homes to the victims of this attack and those shaken by it.

If you want to know who we are, what america is, how we respond to evil -- that's it.

Selflessly, compassionately, not afraid.

In the coming days, we will pursue every effort to get to the bottom of what happened and we will continue to remain vigilant.

Have directed the administration to take appropriate security measures to protect the american people and this is a good time for all of us to remember that we all have a part to play in alerting authorities if you see something suspicious speak up.

I have extraordinary confidence in the men and women of the fbi, the boston police department, and the other agencies that responded so heroically and effectively in the aftermath of yesterday's events.

I am very grateful for the leadership of gov.

Patrick and that the mayor and i know even as we protect our people and aggressively pursue this investigation, the people of boston will continue to respond in the same proud and groot way they have thus far.

And you can expect further briefings from our law of enforcement officials as the day goes on.

When we have more details, they will be disclosed.

What i have indicated to you is what we know now.

When no bombs were set off.

We know that they did some severe damage.

We do not know who did them.

We did not know whether this is an act of an organization or an individual or individuals.

We don't have a sense of motive yet.

Everything else of this.

This speculation.

Abbas we receive more information -- as we receive more information, we will make sure to keep you and the american people posted.

Thank you very much, everybody.

That was president obama delivering a statement on the boston marathon bombing.

Richard falkenrath, a former security adviser to former president bush is here and so is our white house correspondent, julianna goldman.

What struck me about the president's statement as he called the investigation is about an act of terrorism.

He did not say that last night.

Following the news conference with the fbi in boston, it seems that that is where he would've had to go.

Yes, the other thing that stood out is that the president said there is not much information that we have right now.

He said what we know now i have told you.

He described what unfolded yesterday and he is laying the groundwork for saying this is just the beginning of the investigation.

There is still a number of answers that we're waiting for.

President said we still don't know yet who or why this act or the is bombings were carried out whether it is foreign or domestic, an individual or group.

He made another point about calling this a terrorist act.

The statement that he delivered was largely similar to what administration officials said yesterday, urging caution that while it is an act of terror because it targeted individuals, it was meant to inflict harm, we still don't know who is responsible for this.

As the fbi conducts its investigation and takes the lead, they will be treating this as a terrorist attack, what is like dealing with the white house on this particular situation?

The president has confronted domestic crises like the shooting of gabrielle give birds and newtown, conn.. the president has been under pressure to deliver the right message and the right circumstances.

Is this difference?

One of the instances that an administration officials will talk about is back in 2009 with the underwear bomber over christmas -- it took the president and long time to respond to brief the american public and what was actually going on.

That was because they felt that there was not enough information to come out to the cameras.

Now, the president does have information but it is still important for him to be out saying that the investigation is under control and still say they will hold whoever is responsible accountable and bring the full weight of justice.

Even though he does not have the information, it is important for him to come out and keep the american people briefed on what he knows and showing presidential leadership at a time when there is little information out there.

It is a tough job but president obama has got to do it.

Thank you very much, julianna goldman.

He said it is being investigated as an act of terrorism.

We will be back with richard falkenrath and the situation in boston when we come back.

Welcome back.

Moments ago, we heard from president obama of the boston marathon bombing.

With us again is richard falkenrath, a bloomberg contributing editor.

We heard that they're working on this and don't have many more answers as it relates to who, why and to the president talked about the motive.

Do you think he knew more than he said?

Absolutely, he does not have that many facts but he knows a lot more.

They will know a great deal about the bombs themselves and the method of the attack and how they were set off and what kind of detonators were used.

It is not useful for them to release this information to the general public.

The media and the general public would like to know this but there is no reason to do it while there is an active investigation.

Presumably, someone is at large who did this and can do it again.

He came out and talk to people because he is the president and he has to.

If it doesn't do by 4:00, people will wonder where he is.

The president seems to be trading a fine line on the subject of terrorism.

He said it "this was a heinous and cowardly act and given what we know now, the fbi is investigating this as an act of terrorism." anytime a bomb was used to attack innocent civilians, is considered an act of terrorism." the legal definition of terrorism has something to do with the intent of the person who carried it out.

They don't know the intent or the person who carried out so there are not sure if there "formal terrorism charges.

What else could be?

Elastase cautious president would say this is terrorism domestic or international.

He is being very cautious.

There are a range of criminal statutes related to the use of explosives that are just charged under different elements of the u.s. code and carry different penalties.

This is going to be terrorism in the end.

It could be some lone rogue targeting an individual?

They are trained to wait until the facts speak for themselves and not jump to conclusions and there's no need for him to do it.

When they arrest a person, then he can do it.

You don't want to feed the media as demand for comment.

He was to be careful but -- we don't know if there was an act of domestic or foreign terror.

How did they take what they know about the bombs to figure out the answer to that question?

It is a complicated process with a massive amount of information.

The initial information is brought in and there'll be many different varieties like interviews with witnesses and random collins, forensic analysis, social media analysis and they will try to sift through that to figure out which are actionable leads, things that need to be pursued further than for easily, they all decided to part of a task force.

-- they will assign it to be part of a task force.

It is productive, more resources are brought to that threat of the investigation and it is further pursued.

You talked about the idea of the need to manage the flow of information to the media and the general public.

How much stagecraft is involved?

A lot, most of what the president has to do right now is about communication to the public.

There are not that many decisions that can involve him at this point.

He needs to stay break.

The american cable expect the commander in chief to be involved and engaged and address these issues.

He cannot go silent for extended periods of time.

If he called it today and act of terrorism, extremist rhetoric which he avoided, by the evening news for the next time he appears, they would say that you said it is an act of terrorism, what are you doing?

He is being very careful as saying it is an ongoing investigation.

He said we will update you as we have more.

And that america will not tolerate this.

Richard, thank you again for the valuable analysis.

Our of and adam johnson is in boston right now.

He is at copley square, steps away from the finish line of the boston marathon yesterday.

I know you will continue our special coverage of the aftermath of the boston marathon bombing in the next hour.

What is happening on the ground right now?

On the one hand, you've got dartmouth street in front of me where there are bosses taking people to and from offices and behind me, you have a crime scene.

The one thing that is different from this morning is that copley square behind me and a library, there are fewer flashing lights, fewer officers, a sense that perhaps the investigation has moved from the crime scene itself to trying to gather the evidence on video cameras that are all around this area, operated by small businesses.

The challenge for boston is to integrate the busy boston on that side of the street and the crime scene boston on this side of the street.

That is a process we will see evolves over the next couple of hours and will try to get perspective from my guest will join us in half an hour, prof.

Stephen flynn from northeastern which is a college that has class's open.

Not all universe is made that decision and he is the director of the research institute for homeland security.

He will walk us through the process.

He will talk about how boston unites the crime scene boston with be open for busine

This text has been automatically generated. It may not be 100% accurate.

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